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Nikhil Mathew v/s State Bank of India

    W.P. (Civil) No. 3033 of 2018

    Decided On, 22 May 2018

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE P.B. SURESH KUMAR

    For the Appearing Parties: N. Nagaresh, Navod Prasannan Pattali, R.S. Kalkura, Advocates.



Judgment Text

1. Petitioner availed a career loan from State Bank of India (the Bank) during 2007 for pursuing pilot training course. The father of the petitioner who is an officer of the Bank was the co-applicant of the loan. It is stated by the petitioner that he could not secure a suitable job on completion of the course and could not therefore liquidate the loan liability as agreed. Nevertheless, it is stated by the petitioner that he has paid during the last 10 years about Rs.26 lakhs in the loan account. While so, the Bank has issued Ext.P6 communication to the petitioner informing him that it has brought into force a One Time Settlement Scheme called 'Rinn Samadhan-II Scheme' (the Scheme) ; that the Scheme offers significant reliefs to the borrowers and that the petitioner is free to avail the benefits of the Scheme for the purpose of settling his loan liability.

On receipt of Ext.P6, the petitioner though sent a communication to the Bank expressing willingness to

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settle the liability in terms of the Scheme, the request made by the petitioner in this regard was turned down by the Bank in terms of Ext.P7 communication stating that the loan being a staff loan, it cannot be settled in terms of the Scheme. The petitioner is aggrieved by the said decision of the Bank and hence this writ petition.

2. A counter affidavit has been filed by the Bank detailing the stand taken in Ext.P7 communication. In the counter affidavit, it is stated by the Bank, among others, that the officers of Bank who are otherwise capable of settling their loan liability are not entitled to take advantage of the schemes intended for borrowers who are otherwise not capable of settling their liability, especially when such loans are sufficiently secured.

3. Heard the learned counsel for the petitioner as also the learned counsel for the Bank.

4. There is no dispute to the fact that the loan liability of the petitioner satisfies all the eligibility criteria in terms of the Scheme, otherwise, the petitioner would not have been issued Ext.P6 communication by the Bank. The Bank has no case that the said liability falls within any of the exclusions made in terms of the Scheme. The Scheme does not also contain any reservation as regards the loans of which the officers/employees of the Bank are co-applicants.

The short question falls for consideration therefore is whether the Bank is justified in declining the benefit of the Scheme to the petitioner for the reason that his father, who is the co-applicant of the loan, is an officer of the Bank.

5. The learned counsel for the petitioner strenuously contended that the Scheme in the instant case is a non-discretionary and non-discriminatory one and that therefore, the Bank is precluded from declining the benefits of the Scheme to the petitioner for the reason mentioned above.

6. The Scheme is part of the records. The relevant portion of the Scheme relied on by the petitioner reads thus:

Nature of the Scheme

The scheme is non-discretionary and nondiscriminatory in nature.

Branches will identify eligible cases and send written intimations to all eligible borrowers for availing of this facility, detailing the dues (including interest & out of pocket expenses etc) as on cut-off date, concessions offered, OTS amount, payment modalities, last date of acceptance of OTS by the borrower etc. intimations to all eligible borrowers should be sent within 15 days of launch of this OTS Scheme and proof of dispatch / acknowledgment should be held on record.

The Branch functionaries will not have the authority to decline/reject any eligible proposal under this Scheme.

In case of decline/rejection of OTS for any reason, the respective controllers will be the Competent Authority, who should record the reasons for such decline.

To speed up the process, respective DGM & CCO at Circles will identify eligible accounts and branch wise list will be sent to branches for further scrutiny and actions.

In order to bring awareness among the eligible borrowers, the Circles may advise the eligible borrowers through letters/SMS/e-mails to contact the branch for taking the benefits of the OTS Scheme.

As contended by the petitioner, it is stated in the Scheme itself that it is a non-discretionary and non-discriminatory one. Discretion being one's own judgment as to what is best in a given case, as opposed to a rule governing all cases of a certain kind, it is clear that by making the Scheme as a nondiscretionary, the bank has proclaimed that it will not have the right to decline a request for benefits of the Scheme, if the case would otherwise fall within the parameters of the Scheme. Further, by making the Scheme non-discriminatory also, the Bank has reinforced its stand that the borrowers who are satisfying the parameters of the Scheme will not be denied the benefits of the Scheme on any ground whatsoever. A similar issue came up for consideration before the Apex Court in Sardar Associates and others v. Punjab and Sind Bank and others, (2009) 8 SCC 257. It was also a case dealing with a non-discretionary and nondiscriminatory one time settlement scheme. The benefits of the scheme was declined to the party involved in the said case after having informed to him as in the instant case that he is entitled to the benefits of the same on the ground that there is sufficient security for the loan. The Apex Court held in the said case that the bank was not justified in declining the benefits of the scheme to the party involved in the said case. paragraph 33 of the judgment in the said case reads thus :

"The question which arose for consideration before the Appellate Tribunal as also before the High Court was as to whether an offer having been made by the Bank to the appellants herein, it could have turned around and contended that only because the appellants had furnished security to the extent of Rs.11 crores, the same by itself would entitle it to take recourse to a discriminatory treatment. The answer to the said question must be rendered in the negative."

In the light of the said decision of the Apex Court, the Scheme in instant case being a non-discretionary and nondiscriminatory one, in so far as the petitioner has satisfied all the eligibility criteria mentioned in the Scheme, according to me, the Bank is not justified in declining the benefits of the same to the petitioner on the ground that his father, who is the co-applicant of the loan, is an officer of the Bank.

7. The learned counsel for the Bank, placing reliance on the provision in the Scheme that reasons should be recorded for declining the benefit of the Scheme, contended that the Scheme confers discretion on the competent authority to decline the benefits of the same in appropriate cases. I am unable to agree with the said contention. Insofar as it is the proclaimed in the Scheme itself that the same is a non-discretionary and nondiscriminatory one, the provision in the Scheme that the benefits under the same shall be declined only by the competent authority, that too after recording reasons, can only be a provision dealing with rejection of the application for benefit of the Scheme which do not satisfy the parameters of the Scheme.

8. The learned counsel for the Bank also contended that in order to claim a writ of mandamus in a proceedings under Article 226 of the Constitution, there must be a legal right with the party asking for the writ to compel the performance of some statutory duty cast upon the authorities. The learned counsel relied on the decision of the two Judges' Bench of the Apex Court in Oriental Bank of Commerce vs. Sundarlal Jain and Another, 2008 2 SCC 218 in support of the said contention. The power of this Court under Article 226 of the Constitution has been succinctly stated by a three judges' Bench of the Apex Court in the Comptroller and Auditor General of India, Gain Prakash, New Delhi and another vs.K.S.Jagannathan and another, (1987) AIR(Supreme Court) 537 thus:

"There is thus no doubt that the High Courts in India exercising their jurisdiction under Article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the Government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the Government or has exercised such discretion mala fide or on irrelevant considerations or by ignoring the relevant considerations and materials or in such a manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the Government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the Court may itself pass an order or give directions which the Government or the public authority should have passed or given had it properly and lawfully exercised its discretion."

In the light of the aforesaid judgment, the aforesaid contention of the learned counsel for the Bank is only to be rejected and I do so.

In the result, the writ petition is allowed and the respondents are directed to permit the petitioner to settle his liability under the Scheme. The petitioner shall effect the payments due under the Scheme within one month from the date of receipt of a copy of this judgment.
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